Few expected to qualify for Jump Start stimulus
By Hank Lohmeyer
Published Thursday, February 2, 2017 10:36 am
Orchard City and Cedaredge have opted to participate in the state's Rural Jump Start economic stimulus program. But officials believe the pool of new businesses that will qualify for the tax incentives being offered is small.
There's a pretty "slim chance" that participation will attract any new business to the town due to the programs restrictions, observed Orchard City Mayor Ken Volgamore at a recent trustee work session. "But we will support [the program] anyway."
Also, in Orchard City's case, adoption of the program involves pledging to refund local taxes that the town doesn't even collect.
Orchard City's resolution to participate in the Jump Start program states that the town "does hereby agree to refund to the new business 100 percent of the municipal business personal property tax," and that the town also "does hereby agree to refund to the new business 100 percent of the municipal sales and use tax." Neither of the taxes mentioned in the resolution is collected by Orchard City. A new Orchard City business wanting to get the program's benefits would get the same tax breaks just by setting up in the town.
Orchard City and Cedaredge were asked to participate in the program by Delta County Economic Development. DCED director Trish Thibodo told both of the town boards that the pool of qualifying businesses is expected to be small. The reason is that although the program offers local tax break incentives, there are restrictions. The Jump Start program is intended to attract new, high-tech businesses. Restrictions, according to Thibido, include hiring five new people, partnering with a college or university, and not competing with the "core enterprise" of any other existing business in the state.
The Town of Cedaredge has pledged the following for its participation in Rural Jump Start:
"In the course of this participation, the Town of Cedaredge, does hereby agree to refund 100 percent of the municipal business personal property tax imposed on all new businesses to any new business that is approved by the Colorado Economic Development Commission to participate in the Rural Jump-Start program ... understanding that such tax relief is limited by statute to eight years for each new business and that no new businesses may be added to the program after Dec. 31, 2020."
Under the same terms, Cedaredge also pledged, "In the course of this participation, the Town of Cedaredge does hereby agree to refund to the new business 100 percent of the municipal sales and use tax by all new businesses that are approved by the Colorado Economic Development Commission to participate in the Rural Jump Start program."